Now is a great time to take a new look at life insurance as part of a holistic financial plan, according to Northwestern Mutual.
"The recession has been a wake-up call for many Americans, exposing weaknesses in people's long-term financial plans," says Northwestern Mutual Vice President, David Simbro. "With life expectancy at an all time high, the average American should be financially prepared to live well beyond traditional retirement age. And the recent hike in unemployment levels has likely left many without their group life insurance. The good news is that, in addition to providing a death benefit, individual life insurance is a flexible asset that can plug existing holes in many financial security plans. This flexibility makes it an attractive tool in both good times and bad."
Although life insurance is most often purchased to provide a death benefit, many consumers don't realize that the cash value of a permanent life insurance policy grows tax-deferred over time and is guaranteed to increase in value each year, never going down. Northwestern Mutual encourages individuals to consider these unique "living benefits" of permanent life insurance, which include:
-- Certainty. Permanent life insurance is designed to last your entire
lifetime, like "owning" the protection, while term insurance is more
like "renting" the protection for a limited period of time. You build
equity when you "own" your insurance, just as you do when you own a
home, and can be certain that the protection will be there when you
-- Liquidity. Permanent life insurance can act as an alternative when you
need access to cash. The cash value that builds each year in your
policy can be used in a variety of ways, such as funding an education,
starting or expanding a business or providing a supplemental income
stream in retirement.
-- Flexibility. Permanent life insurance can be used to meet your needs
as they evolve over your lifetime. To protect a young family, it is
there in the event of death. Later in life, the same policy can be
used to help pay estate taxes, leave a legacy to those you care about,
or help fund an unexpected expense or opportunity.
When assessing the role of life insurance in long-term financial security planning, it's also wise to consider two key factors: the professional you're working with and the company behind the product. Find a trusted financial professional who will work with you to develop a customized strategy to meet your individual needs and objectives. Also, look for a reputable company with a history of strength and stability, such as those with high insurance financial strength ratings from the four major agencies: Fitch Ratings, Moody's Investor Services, Standard & Poor's, and A.M. Best.
"Financial security is about more than growing and managing your assets; it's about growing, managing and protecting your assets," adds Simbro. "Now is the time for people to look beyond mere investments to be sure they're adequately managing risk."
About Northwestern Mutual
The Northwestern Mutual Life Insurance Company - Milwaukee, WI (Northwestern Mutual) has helped clients achieve financial security for more than 150 years. As a mutual company with over $1 trillion of life insurance protection in force, Northwestern Mutual seeks to share its gains with policyowners and deliver consistent and dependable value to clients over time.
Northwestern Mutual is an industry leader in total individual life insurance and disability insurance dividends paid to participating policyowners. Though dividends are not guaranteed, are reviewed annually and are subject to change, the company has paid life insurance dividends every year since 1872.
Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investment Group. Further information can be found at http://www.northwesternmutual.com/.
First Call Analyst:
SOURCE: Northwestern Mutual
CONTACT: Jean Towell of Northwestern Mutual, 1-800-323-7033,
Web Site: http://www.northwesternmutual.com/